China’s call for ‘core technology’ breakthrough belies its weakness in semiconductors
Without US-made chips, software and other equipment, ZTE will be under pressure to meet its global network equipment and smartphone orders, as well as maintaining the momentum of its 5G-related research and development
China’s hi-tech industry may need to stay the course in investing in crucial technologies, which may not result in near-term profits, in a bid to help lessen the country’s dependence on imported semiconductors, software and other resources.
This has come to the fore as ZTE Corp, China’s largest listed telecommunications equipment maker, fights for its survival amid a US government ban on the export of American-made chips and other components to the company.
“Quickly earning money is a trend among many Chinese entrepreneurs. We have seen many original equipment manufacturers in China earn easy money by building products that do not require sophisticated technologies,” said Li Yi, chief fellow at the Shanghai Academy of Social Sciences.
“Many of these entrepreneurs bail out on making huge long-term investments in industrial design and advanced manufacturing.”
Such short-term approach has partly negated recent government investments as well as strategic mergers and acquisitions in major segments of the domestic hi-tech industry, particularly in semiconductors.